4 Funds to Harness the Awakening Bear

Consider these short options while the market looks shaky

The bull market of 2013 has gotten shakier over the past few weeks. Including yesterday’s big drop, the S&P 500 is off 3.4% since it peaked May 22.

It’s likely this market, combined with the current climate — China’s growth in question, Europe remaining stagnant, U.S. interest rates rising — has made investors a little trigger happy, with many now just wanting to protect their nice gains.

As we’ve seen over the years, corrections can be swift and brutal. So if the market’s fall is destined to continue, what can investors do?

Well, one option is to take a look at bear funds. Essentially, these engage in the practice of short selling, which allow investors to gain when stocks fall.

That’s not to imply you should load up on these funds. In fact, over the long-term, they’re traditionally big-time losers. However, they can be useful as a small part of the portfolio for short periods of time to help soften the blow of a market fall.